Despite Federal Funding, Medicaid Expansion is not One-Size-Fits-All

A recent Commonwealth Fund study analyzed the impact of the optional Medicaid expansion — in which a state could increase Medicaid eligibility to all state residents under 138 percent of the Federal Poverty Level (FPL) — on overall federal transfers to the states. The report concludes that expanding Medicaid is a net positive for all states. At the heart of the conclusion is the argument that the states’ budgetary contribution, which will eventually hit 10 percent of the costs for the newly eligible, is a “cheap” way to improve the state budget. 

New Medicaid Enrollees Younger, But Not Necessarily Healthier

The most common criticism of the Affordable Care Act’s (ACA) Medicaid expansion is that it will cost the federal government, states, and taxpayers hundreds of billions of dollars in the coming years.  A study released this week by professors from the University of Michigan posits that expansion of the program may actually result in lower than expected costs, thanks to an increase in younger, healthier enrollees. However, the lifestyle choices of these young, newly eligible beneficiaries may, in fact, have the opposite effect on program expenditures long term.

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